A Connecticut man already facing charges he sexually assaulted prostitutes while impersonating a police officer was arrested and subsequently pleaded guilty to charges that he duped investors out of more than $1 million in a suspected Ponzi scheme. Frank Mete, 55, appeared before a Connecticut federal judge on Wednesday to plead guilty to counts of wire fraud and tax evasion. While a sentencing date has not yet been set, the wire fraud charges carries a maximum penalty of twenty years in prison while the tax evasion charge carries a maximum five-year prison term.
Beginning in 2009, Mete solicited potential investors by promising annual returns ranging from 15% to 18% through his efforts as a "hard money lender." According to Mete, these returns were possible through linking up potential investors with purported individual borrowers seeking alternative financing. To convince investors of the legitimacy of the scheme, Mete would provide documents bearing borrower details and even created separate bank accounts for each borrower. In total, Mete raised over $1 million from investors.
However, Mete admitted that there were no borrowers, and that rather than make "hard money" loans, Mete instead used investor funds to cover his personal expenses and pay returns to existing investors. Mete also admitted that he failed to file income tax returns from 2009 to 2012, thus depriving the government of hundreds of thousands of dollars in tax revenue.
Incidentally, Mete has been in custody since early November, when he was arrested on charges he had sexually assaulted multiple women by posing as a police officer when he met prostitutes at several Connecticut hotels. Mete would then allegedly blackmail the prostitutes for sex and money in lieu of arresting them. Mete was arrested on various charges including first-degree sexual assault, unlawful restraint, first-degree robbery, impersonating a police officer and sixth-degree larceny.